ASBCA 61109

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of -- ) ) Central Texas Express Metalwork LLC ) ASBCA No. 61109 d/b/a Express Contracting ) ) Under Contract No. FA3047-11-C-0023 ) APPEARANCES FOR THE APPELLANT: Johnathan M. Bailey, Esq. Kristin E. Zachman, Esq. Bailey & Bailey, P.C. San Antonio, TX APPEARANCES FOR THE GOVERNMENT: Jeffrey P. Hildebrant, Esq. Air Force Deputy Chief Trial Attorney Lt Col Nathaniel H. Sears, USAF Phillip E. Reiman, Esq. Trial Attorneys OPINION BY ADMINISTRATIVE JUDGE SWEET ON THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT This is an appeal of a contracting officer's (CO's) final decision rejecting the claim of appellant Central Texas Express Metalwork LLC d/b/a Express Contracting (CTEM), asserting that it and its subcontractor were entitled to equitable adjustments. The government has moved for summary judgment, arguing that a settlement agreement releases the claims. We grant the government's motion, and deny the appeal. STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 1. On 18 August 2011, the United States Air Force awarded CTEM Contract No. FA3047-11-C-0023 (0023 contract) (R4, tab 1). Under the 0023 contract, CTEM was to repair and replace heating, ventilation, and air conditioning (HVAC) systems in building 7359 and replace two chillers in building 7359 at Lackland Air Force Base in exchange for $2,457,237 (id. at 3). The 0023 contract provided that "Final Payment for each delivery order will be made only after receipt of... release of claims" (id. at 8). 1 1 Despite the mention of a delivery order, the contract does not call for the use of delivery orders (R4, tab 1). I 2. CTEM entered into a subcontract with International Mechanical Services, Inc. (IMS) for materials, labor, and equipment (app. resp., ex. 1, ii 2). 3. In 2013, IMS sued CTEM in the United States District Court for the Western District of Texas (app. resp., ex. lA at 2). IMS and CTEM entered into a settlement agreement resolving that case (id.) and CTEM agreed to sponsor IMS's claim against the government (id. at 3). 4. In November 2013, Ryan Bueno-the CO-and Kara Clayton-CTEM's president-agreed to reduce the scope of the 0023 contract by not requiring CTEM to install equipment at building 73 59. As a result, the parties agreed to a $286,645 .41 credit to the Air Force for the reduced scope. The parties also agreed to a $62,421.68 equitable adjustment for CTEM for delays and additional work. Finally, Ms. Clayton indicated that CTEM intended to file an additional delay claim. (R4, tab 37 at 5-7, tab 66 at 2) 5. On I 0 September 2014, CTEM submitted a request for equitable adjustment (REA) for $643,841.88 in increased costs as a result of the Air Force's purported delays and changes (R4, tab 16 at 1-2). The REA stated that it "includes various subcontractor requests for equitable adjustments caused by the same delays and changes" (id. at 2). In particular, the REA indicated that it sought $345,691.07 on behalf of IMS (id. at 13-17). 6. On 25 May 2016, the Air Force and CTEM met to negotiate the REA, which included the sponsored claim of IMS (R4, tab 37 at 4-6). At the time, there was an outstanding contract balance of $395,727.99 (id. at 4). That outstanding balance did not include the agreed-upon $286,645.41 credit to the Air Force, the agreed-upon $62,421.68 equitable adjustment or any amount for the pending REA (id. at 5-7). "The final agreed amount to settle the [pending] REA [was] $395,727.99, that is approximately 56% of the amount of the REA when including the contract increase agreed to by Mr. Bueno in November 2013" (id. at 7). Thus, the Air Force essentially agreed to forego its credit ($286,727.99), and CTEM agreed to forego its equitable adjustment ($62,421.68) and pending REA ($643,841.88). Instead, the Air Force simply would make a final payment of $395,727.99-the outstanding contract balance. (Id. at 5-7) Settling for the outstanding contract balance would allow for quicker payment. CTEM and IMS further agreed that CTEM would provide a final invoice and release of claims (release).